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Riddhi Siddhi Gluco Biols
BSE: 524480|ISIN: INE249D01019|SECTOR: Miscellaneous
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« Mar 13
Notes to Accounts Year End : Mar '14
CORPORATE INFORMATION:
 
 Riddhi Siddhi Gluco Biols Limited (the Company) is engaged in the
 business of generation and selling power through windmill and in
 business of trading in agriculture and metal commodity items.
 
 1.  Terms / Rights attached to the sharesholders:
 
 (i) Equity Shares:
 
 The Company has only one class of equity shares having at face value of
 Rs. 10 per share. Each share holder of equity shares is entitled to one
 vote per share. The dividend proposed by the Board of Directors is
 subject to approval of the shareholders in ensuing Annual General
 Meeting. The Company declares and pays dividend in Indian rupees. The
 Board of Directors have recommended dividend pay-out of Rs. 3 per share
 (Previous Year: Rs. 10 per share) to the equity shareholders of the
 Company.
 
 In the event of liquidation of the Company, the holders of the equity
 shares will be entitled to receive remaining assets of the Company,
 after distribution of all preferential amounts. The distribution will
 be in proportion to the number of equity shares held by the
 Shareholders.
 
 (ii) Preference Shares:
 
 The Company has only one class of preference shares i.e. Non Cumulative
 Redeemable Preference Shares of Rs. 10 per share.  Such shares shall
 confer on the holders thereof, the right to a 8% preferential dividend
 from the date of allotment, on the capital for the time being paid up
 or credited as paid up thereon.Such shares shall rank for capital and
 dividend and for repayment of capital in a winding up, pari passu
 interse and in priority to the Equity Shares of the Company, but shall
 not confer any further or other right to participate either in profits
 or assets.
 
 2.  Terms attached to the preference shares:
 
 The terms of redemption of Preference Share capital at face value is
 extended by two years during the year from November 2013 to November
 2015 with a put and call option. The Preference Share capital has
 original maturity period of 7 years which was extended over a period of
 time, and again by two years from November 2013 to November 2015.
 
 (a) ECB carries an interest rate of 6% to 7% p.a. and are secured
 against the windmills of the Company. ECB of JPY 7,117.50 Lacs is
 payable in 14 half yearly instalments and ECB of USD 177.78 Lacs is
 payable in 14 half yearly instalments. During the year, the Company has
 not complied with certain financial debt covenants related to these
 ECB. The lenders without recalling the loan have served notice of
 payment of interest at an accelerated rate of interest and have also
 asked for additional security to cover the shortfall in security
 provided. The Company is in negotiation with lenders to provide
 additional security.
 
 (b ) Vehicle loans are secured by hypothecation of underlying vehicle
 taken against loan.
 
 3.  Contingent liabilities and commitments (to the extent not provided
 for):
 
                                                          (Rs. in lacs)
 
 Particulars                                     As at            As at
                                       31st March 2014  31st March 2013
 
 Claims against the Company 
 not acknowledged as debt
 
 Excise Duty (refer note a)                   2,486.48         2,486.48
 
 Sales Tax (refer note b)                         1.00             1.00
 
 Service Tax (refer note c)                      27.60            27.60
 
 Income Tax (refer note d)                    2,976.64           921.13
 
 Total                                        5,491.72         3,436.21
 
 Commitments:
 
 Estimated amount of sales 
 contracts to be executed against                             13,250.82
 the stock in trade lying 
 as an inventory
 
 Uncalled amount of contribution 
 in private equity funds                        800.00           400.00
 
 a.  Towards Levy of excise duty, including penalty but other than
 interest thereof on account of dispute in classification of finished
 goods, against which Company has appealed before Appellate Authorities
 and Commissioner (Appeals).
 
 b.  Towards penalty charges on account of dispute for sales tax demand
 against the pending form 19 to be submitted to tax authorities.
 
 c.  Towards Service Tax demand on refund claimed on services availed on
 export of goods i.e. CHA Services, Port Services and Goods Transport
 Services.
 
 d.  The Income-Tax assessments of the Company have been completed up to
 Assessment Year 2012-13. The disputed demand outstanding up to the said
 Assessment Year is Rs. 2,976.64 lacs. Based on the decisions of the
 Appellate authorities and the interpretations of other relevant
 provisions, the Company has been legally advised that the demand is
 likely to be either deleted or substantially reduced and accordingly no
 provision has been made.
 
 It is not practicable to estimate the timing of cash outflows, if any
 in respect of matters (a) to (d) above, pending resolution of the
 proceedings with the respective appellate authorities.
 
 4.  Employee Benefits:
 
 a.  Defined Benefit Plan
 
 I.  Gratuity:
 
 The Company has a Defined benefit Gratuity plan. The unfunded plan
 provides for a lump sum payment to employees, at retirement, death
 while in employment or on termination of employment, of an amount
 equivalent to 15 days salary for each completed year of service or part
 thereof in excess of six months. Vesting occurs upon completion of five
 years of continuous service.
 
 II.  Leave encashment:
 
 The Company has recognised amount of Rs. 0.39lacs (Previous year: Rs.
 3.70lacs) as expense in the Statement of Profit and Loss in respect of
 Compensated absences.
 
 5.  As per Honorable High Court of Gujarat''s order approving the
 Scheme of Arrangement (the Scheme) in the nature of demerger, from
 the Appointed Date of October 1, 2011 with Effective Date of May 29,
 2012, the Corn Wet Milling undertaking was transferred to Riddhi Siddhi
 Corn Processing Private Limited (RSCPPL). The Scheme and related
 transactions for demerger and reduction in share capital was given
 effect to in the audited financial statements for the year ended 31st
 March, 2012.
 
 As part of the Scheme, all assets and liabilities of the Corn Wet
 Milling undertaking including employees and their related liabilities
 were transferred to the RSCPPL, however contingent liabilities related
 to the period prior to Appointment Date i.e. 1st October 2011, arising
 out of regulatory, tax, labour, operational or environmental matters
 etc. remained with the Company.
 
 As per the High Court Order, resultant excess of Rs. 63,807.06 lacs
 being the amount of net sale consideration and net value of assets and
 liabilities transferred had been added to the capital reserve under
 reserves and surplus. In view of specific option granted by the
 Honorable High Court of Gujarat''s order, during the previous year, the
 Company has transferred the said amount to the General Reserve.
 
 6.  The Company has commodity trade receivables amounting to Rs.
 7,623.55 lacs as on 31st March, 2014 pertaining to various commodities
 contracts executed through brokers on the National Spot Exchange
 Limited (NSEL). Over past few months, NSEL is unable to fulfill its
 scheduled payment obligations as agreed by them. Consequently, the
 Company has pursued a legal action against NSEL through NSEL Investor
 Forum which has also filed complaint in Economic Offences Wing of
 Mumbai (EOW). Considering the recent development and action taken by
 EOW against various borrowers of NSEL, the Company believes that it
 shall recover the outstanding dues over a period of time and therefore,
 the management believes that no provision is required to be made as of
 31st March, 2014. The Company has received Rs. 5.79 lacs between year
 ending 31st March, 2014 and date of adoption of accounts by the Board
 of Directors.
 
 7.  Segment Reporting:
 
 a.  The Company has disclosed business segment as the primary segment.
 Segments have been identified taking in to account the nature of the
 products, the differing risks and return, the organization structure
 and internal reporting system.
 
 b.  After the Demerger of Corn Wet milling business and its transfer to
 the Resulting Company in 2011-12, the Company''s Operations
 pre-dominantly relates to Wind Energy Generation and trading of
 agriculture and metal Commodity items. Accordingly, the Company has
 identified Wind Energy Generation and Trading business as the
 operating segments, consisting of sale of wind power and trading of
 commodity items respectively.
 
 c.  Secondary segment reporting is based on the geographical location
 of customers. Since, company has its operation activities limited to
 India only; no separate disclosure pertaining to secondary segment
 based on geographical location has been given.
 
 d.  Segment Information in terms of Accounting Standard 17 for the year
 ended 31st March, 2014 is as below:
 
 8.  On September 22 and 23, 2011, the Company was subjected to Search,
 Survey and Seizure operation by the Income Tax Department under section
 132 and 133 of the Income Tax Act, 1961 (the Act). Subsequent to the
 above, during the year ended on March 31, 2012, the Company had made
 disclosure of an unaccounted income of Rs. 1,609.75 lacs under section
 132(4) of the Act and the same had been shown as exceptional item
 under Discontinuing Operations in the Statement of Profit and Loss and
 the unaccounted income of Rs. 1,609.75 lacs had been accounted as
 utilized towards land development at Gokak factory premises during the
 year ended on March 31, 2012. The return of Income for the Assessment
 Year 2012-13 has been filed accordingly and the Company has provided
 for the resultant tax liability. In March 2014, the assessment is
 completed and there are no significant adverse findings during
 assessment.
 
 Based on the decision of Appellate authorities and the interpretation
 of relevant provision, the Management of the Company has assessed that
 the demand is likely to be either deleted or substantially reduced and
 accordingly no provision is required to be made in the books of
 accounts.
 
 9.  The Company''s fixed assets include windmills having generating
 capacity of 33.5 MW and carrying amount of Rs. 13,384.43 lacs as at
 31st March, 2014. The Company has entered into long term Power Purchase
 Agreement (PPA) in 2012 with State Distribution Corporations (Discoms)
 for a period ranging from 13-25 years based on a substantially fixed
 tariff per unit.
 
 An incessantly lower Plant Load Factor (PLF) of windmills then expected
 over last few years of operations due to non-availability of grid and
 land related issues has triggered assessment of recoverable amount of
 the windmills in terms of Accounting Standard (AS) 28, Impairment of
 Assets. For the purpose of said assessment, windmills considered as a
 cash generating unit. For the purpose of cash generating unit,
 management has concluded that each of the windmill cannot be a cash
 generating unit, windmill farm at each location would be an appropriate
 cash generating unit.The ''Recoverable Amount'' of windmills measured on
 the basis of its Value in Use by estimating the future cash inflows
 over the estimated useful life of the windmills. The cash flow
 projections are based on estimates and assumptions relating to tariff,
 operational performance of the windmills, recovery of damages from
 supplier for under performance of the windmills, inflation, terminal
 value etc., which are considered reasonable by the management.
 
 On a careful evaluation of the aforesaid factors, the management has
 concluded that the Recoverable Amounts of the windmills are higher than
 their carrying amounts as at 31st March, 2014. In case, these estimates
 and assumptions change in future, there could be a corresponding impact
 on the Recoverable Amounts of the windmills.
 
 10.  The Board of Directors at their meeting held on 20th May, 2014
 have, subject to the approval of shareholders in general meeting
 through postal ballot and other regulatory approval, recommended a
 proposal to buy back, on a proportionate basis, from the shareholders/
 beneficial owners of the equity shares of the Company as on the record
 date, up to 23,69,575 equity shares of the face value of Rs. 10 each
 (representing 25% of the total equity share capital of the Company) at
 a price not exceeding Rs. 450 per equity share payable in cash for a
 total consideration not exceeding Rs. 10,663.09lacs (the Maximum
 Buy-Back Size) which is less than 25% of the total paid up equity share
 capital and free reserves as per audited accounts of the Company for
 the financial year ended 31st March, 2014 through Tender Offer route
 as prescribed under the Securities and Exchange Board of India
 (Buy-Back of Securities) Regulations, 1998.
Source : Dion Global Solutions Limited
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